Pandemic fluctuations persist in Vietnamese labour market

High determination and great efforts to fulfil the dual goal of containing the spread of the pandemic and promoting economic growth have somewhat improved the bleak domestic labour and employment situation. However, the last outbreak in the community of COVID-19 took place right before Lunar New Year and affected the job recovery of Vietnam’s labour market for the first quarter of 2021, affecting more than 9 million workers and leaving 1.1 million people unemployed.

According to the report from the General Statistics Office (GSO), about 9.1 million Vietnamese aged 15 or above have been adversely affected by the COVID-19 pandemic. Among the affected, 540,000 lost their jobs during the period, 2.8 million had their work suspended due to interrupted production, and 3.1 million had their working hours reduced or took unpaid leave, with 6.5 million others reporting reduced incomes.

Labourers in urban areas were more severely affected than those in rural areas, with 15.6 per cent of workers in the cities affected compared to 10.4 per cent in rural areas.

From an economic sector perspective, the sector least affected by the pandemic was agro-forestry-fisheries with 7.5 per cent of workers reporting to have been negatively affected by the pandemic. Industry and the construction sector ranked second with 16.5 per cent of workers affected. Workers in the service sector were the most severely affected, standing at over 20 per cent.

Given the current population growth momentum, the workforce next year will be larger than in the same period of last year. However, the labour force aged 15 and over in the first quarter of 2021 was 51 million people, down 1.1 million from the previous quarter and over 180,000 people from the same period last year.

The indicators have uncovered fluctuations in the Vietnamese economy and the labour market in the pandemic era, and represent a huge challenge to the government’s efforts to achieve economic development and keep the coronavirus at bay.

Contrary to the fall in employment, the average income of workers in the first quarter of 2021 still increased compared to the same period last year, except for workers working in the arts/entertainment and transportation industries.

Workers’ average monthly income increased to just over $270, rising by nearly $15 on-quarter and up $4.60 on-year. The average monthly income of male workers was 1.4 times higher than that of female workers ($317 against $226); and the average monthly income of workers in urban areas is 1.5 times higher than those in rural areas.

The average monthly income of workers increased in all three economic sectors. Average monthly wages by workers in the agro-forestry-fishery sector was $156, an increase of $7.80 compared to the same period last year, workers in the industry and construction earned on average $313 per month, an increase of $4.80 and workers in the service sector earned $326, an increase of $2.30 over the same period last year.

Although the prospects of the labour market are still dark, positive signals raise hopes of recovery and prosperity for the labour market in the near future. Survey results of the GSO show that the pandemic has contributed to changing working habits, promoting the application of IT among workers to adapt to the unpredictable developments of the pandemic. More than 78,000 workers took the initiative in digital transformation and application of IT at work in the first quarter alone.

Meanwhile, foreign direct investment into Vietnam is expected to continue to rise in 2021, leading to a large recruitment demand for workers with technology skills and creating further momentum for the recovery of the labour market.

According to a survey by Navigos Search, many manufacturers, especially in the automotive electronic components segment from Europe, North America, China, and Japan, are exploring the market to invest in building factories and developing production and business in Vietnam by the end of the year.

Five professions that are expected to soon resume recruitment according to the survey include ICT, retail and trade, processing and manufacturing, professional consulting services, and healthcare.

Nguyen Thi Thanh Mai - Deputy director, Population and Labour Statistics Department The labour and employment situation in the first quarter was gloomy, so how did the average income of employees increase? The pandemic returned here right before the Lunar New Year, different from the 2020 pandemic peak in the second quarter, causing the labour market’s recovery to be temporarily interrupted. However, we evaluate that this situation is not too serious. Vietnamese businesses also have experience in adapting to unpredictable developments of the pandemic, and they come up with more suitable production and business measures. Therefore, the income of employed workers has increased slightly. What solutions does the GSO suggest to solve difficulties for the labour and employment market? The GSO has proposed that the government, ministries, and branches continue research of vaccine passport issuance, building the necessary criteria to open the international tourism market to help the service and tourism industry not to miss opportunities for recovery and development. However, that would still only be a temporary measure; we still have to continue to find other solutions to both ensure pandemic prevention and economic development. In addition, the statistics on the labour situation in the first quarter of 2021, using the new conceptual framework agreed by the member states at the 19th International Conference on Labour Statistics, has separated 3.5 million workers engaged in subsistence work in the agricultural production from the group of employed workers. Previously, this group of 3.5 million workers was included in the employed workforce, but under the new standards, they fall into two cases: unemployed or not participating in the labour force; while two-thirds of these 3.5 million are unskilled female workers in rural areas. I think this will help us to have more appropriate policies such as encouraging and training to attract 3.5 million subsistence workers to participate in the labour market to improve productivity and life quality for workers. How do you assess the quality of the current Vietnamese labour force and what solutions does the country need to improve human resources? The quality of human resources in Vietnam is not good compared to other countries in the region and around the world. The trained workforce that is certified to international standards accounts for only 24.5 per cent of the workforce. We must strive to increase this to 28 per cent by 2025. In order to improve, I think that Vietnam needs to streamline and promote training, especially in occupations participating in the global value chain, while short-term training should be reconsidered.